Revealed: The bonus list that encourages hard sell sales culture among 'advisers' in the branches of Britain's biggest bank

Lloyds TSB is mis-selling products that may not be the right fit for their customers, a staff member at a busy South London branch claims as he lifts the lid on the intense target pressure culture at the bank.

He has sent This is Money a document revealing how many points each member of staff 'scores' if they sell certain products as they aim to hit targets - and how this can result in customers not getting the 'best advice.'

At the same time, a bewildered This is Money reader who walked into a Halifax branch wanting to take out a simple two-year fixed savings account was left bamboozled when a financial adviser tried to talk her into taking out an investment product.

Lee Boyce investigates the explosive
accusations towards the part-nationalised bank and how this is
potentially leaving thousands of its customers worse off.

Points target: Staff have a sheet of products which garner different points - if they hit target, they obtain a bonus

Lloyds Banking Group, Britain's biggest bank by customer numbers, has admitted four in ten customer-facing staff earn extra payments if customers are persuaded to buy additional financial products. Every adviser you speak to will be incentivised.

They get bonuses if they can entice millions of loyal account holders to fork out for costly insurance policies or ‘premium’ current accounts which charge a monthly fee.

This is Money has been speaking to a Lloyds TSB staff member, dismayed by the way the bank treats workers, which then has a detrimental impact on customers.

The whistleblower - who has worked for the 39 per cent taxpayer-owned bank for almost two years - exposes some truly shocking details, with tales of mis-selling products and not informing customers of the best products they can get as a result of high targets.

He says the only reason he hasn’t left the bank and is staying anonymous, is the tough job market conditions currently being faced by financial services staff.

Quarterly points target to sell customers’ products

Targets: Each member staff needs to sell a certain quota of products so they can reach their sales target for the quarter

Some staff are given a ‘points target’ – essentially, they earn points by selling products and get a bonus if they hit the target.

Figures from Lloyds suggest the average annual amount could be £2,500 per employee or £6,500 for branch managers. Our whistleblower says the bonuses are far higher.

He says that the quarterly target equated to his annual salaries, times two. So if a member of staff earned £21,000 a year, it would mean a commission target of 42,000 points for the quarter.

In the document below, it shows how many points staff get for selling certain products. One example is a ‘packaged’ current account.

These accounts come with ‘bolt-on’ extras, such as travel insurance, breakdown cover and other incentives to pay a monthly fee for - and are often unsuitable for customers who don't make the most of the add-ons.

Lloyds TSB has four paid-for current accounts – the Silver, Gold, Platinum and Premier account – which come with fees ranging from £9.95 to £25.

For selling these accounts, staff members ‘win’ 200 points – or four per cent of the whistleblower’s weekly target. If they offer customers the alternative free current account, which may be the better fitted product for some, they will get just 30 points – or 0.6 per cent of his target.

This would mean selling 25 of these paid-for accounts per week will enable him to hit his target. He’d need to get 167 customers to open the free account each week to meet target – which in reality is unattainable.

At the same time, staff are offered an extra 55 points for each £1,000-worth of loans borrowed by a customer. This means they are actively encouraged to egg on customers to borrow more than asked for, the whistleblower says.

Other products carry hefty commission points, including a main mortgage referral at 1,200 points and a referral for an investment product with Scottish Widows leading to 500 points.

A Lloyds TSB spokesman said: ‘We have a clear incentive framework for colleagues that ensures we reward behaviours that are focused on achieving correct customer outcomes and excellent service.

'Colleagues are encouraged to make sure the customer has the product that best meets their needs and we have taken steps in the past year to ensure as much as possible that there is no product bias in our framework.

‘We review our incentive schemes four times a year to ensure they are relevant and appropriate to meet the needs of both our colleagues and customers. We will continue to conduct regular quarterly reviews to allow our framework to evolve and to ensure we can make improvements where necessary for the benefit of our customers.’

Points: Each one of the products a staff member sells of the above, they accrue points to go towards their collective target

Mis-sold PPI going back into Lloyds TSB accounts

Mis-selling
has dragged a number of banks down in recent years. The payment protection insurance (PPI) scandal, for example, will result in
£10billion worth of compensation pay-outs for thousands of customers.

It
came about after banks added PPI to millions of credit cards, loans and
mortgages, despite it being worthless to many of those who had it added
to the product unwittingly – and Lloyds was one of the worst offenders
of the scandal – its own PPI mis-selling accounted for £4.3billion of
the £10billion fiasco.

And
the whistleblower says that although Lloyds is actively encouraging
customers affected to reclaim mis-sold PPI, staff are then told to push
the VERY SAME customers to put the money into more Lloyds products.

We took this claim to Lloyds and it said: ‘If a customer has money to
invest or save, regardless of whether this came from a PPI claim or any
other source, then opening a savings account is clearly an option for
the customer and may form part of the advice offered.’

Best savings account rates are online – but staff don’t reveal this

Another truly staggering accusation from the whistleblower is that customers who come into branch asking 'what savings account will give them the best return for their money' are often misled.

This is because the best rates the group offers are online. But members of staff who tell a customer this will not score any commission points. Getting them to open a lower paying savings account in branch will garner them vital commission points. This means the advice they are given is not always impartial.

He also says the bank is 'preying on customers' by offering them 'terrible' structured products that do not outperform the majority of funds on offer from other financial institutions. Yet, staff are actively encouraged to sell these products to customers who are then 'put in danger.'

Further below, we reveal how one customer of Halifax – which is part of Lloyds Banking Group - was left baffled by investment diagrams when she tried to open a simple fixed-rate savings account, to further back up the accusations made above.

A Lloyds spokesman said: ‘Differential pricing for products sold over the internet is not unusual across many industries, including financial services. Colleagues are instructed to offer products and services across all channels depending on what is most convenient for the customer.’

Explosive claims: A whistleblower member of staff in a busy Lloyds TSB branch lifts the lid on the intense working environment at the bank and how target-driven sales results in mis-selling to customers

One week crash course to learn the products inside out

Not only are products being sold to customers who are most likely to be unsuitable for them, the whistleblower says he was given just a one-week basic crash course training session about all of the products. Straight afterwards he was thrown into the branch to sell these products.

Lloyds said that it has a ‘comprehensive training framework’ while colleagues must ‘undergo a series of observations and tests prior to interacting with customers in order to prove their competence.’

Staff are also expected to have a full diary each day of customers coming into to visit which are ‘targets’ to sell products to, the whistleblower claims.

He adds that they are under such extreme pressure to meet and exceed these targets that they are being ‘bullied’ into working outside their contracted hours to ‘cold call’ people to try and sell products.

He told me that if staff are struggling to meet targets, they are forced to stay once the branch has shut and are shouted down when they refuse.

He also says that his line-manager is telling staff to do what he says because ‘they will not be able to get a job anywhere else’ due to the tough employment conditions people are facing in Britain.

They are also having annual leave days stripped and are even struggling to take time off to do essential things, such as book a doctor’s appointments, because of the strict conditions.

All of this comes, he says, as line managers in branches can earn quarterly bonuses of ‘tens of thousands of pounds,’ while other staff members can also obtain quarterly bonuses reaching ‘thousands of pounds.’

Same old story: Halifax and Lloyds TSB come under the microscope amid claims of mis-selling products to customers

Lloyds said: ‘Colleagues do call customers if they believe there is an offer which may be relevant to them as part of offering a good service. This may be after branch hours if that is a more convenient time for the customer.

‘We do not tolerate any form of workplace bullying within the organisation and urge any employee who believes they have been the subject of bullying or harassment to report it to their manager or our HR department.’

‘The average Lloyds Banking Group pay out, per eligible individual, for the first quarter of 2012 was £623 and across the bank manager population it was £1,660. We monitor these payments on a regular basis to make sure they are appropriate and in line with the market.’

If the above accusations from the whistleblower are true, it is sure to irk millions of already beleaguered banking customers who are at the end of their tether after various bank scandals in recent years.

Because staff are being incentivised to hit these targets they are not acting in the ‘customers best interests’ and therefore resulting in them taking out unsuitable products.

Last week, a report from the Financial Services Authority (FSA), said account holders are being viewed only as ‘sales targets’ exploited by ‘pile it high and sell it quick’ tactics that verge on the criminal.

The FSA couldn’t comment on the Lloyds TSB staff member’s acquisitions or the case of the Halifax customer who was offered investment products below.

However, in the report last week, Martin Wheatley, of the FSA, said: ‘Some time ago, financial institutions changed their view of consumers from people to serve, to people to sell to.

‘It has been too easy, for too long, for those selling or giving advice to be motivated solely by the rewards on offer to them, rather than how to enrich their customer.’

‘I popped into Halifax for a two-year fixed savings account – and was hit with a complicated investment product hard sell’

Further to the whistleblower above, This is Money has been contacted by a reader who was left confused after visiting a Halifax branch expecting to open a savings account.

The reader, who simply wants to be referred to as Danielle, is 26 and a travel executive living in South London. She walked into a branch after trying to transfer money from another high street bank, which was earning a paltry rate of interest, into a two-year fixed account.

After doing her research using the This is Money independent savings table and finding that not only was Halifax top of the table at the time, but also offering a once a month prize draw with a top prize of £100,000, she decided the account was the best place for her cash.

Hard sale: Danielle knew what savings account she wanted, so why was she offered an investment product?

She had tried to open the account online to avoid the branch, but found the website kept crashing on her laptop. She decided instead to to pop into a branch during her lunch hour.

However, what transpired was far from a smooth transaction. ‘All I wanted to do is put my money away for two years at the highest rate possible on the High Street with minimal hassle. I was expecting it to be opened and to have some of my lunch break spare,’ she told me.

She asked at the counter if she could open the account and was told she would have to book in with an adviser due to the sum of money involved.

At the appointment, she was met by an over-zealous salesman.

He tried to convince her to put the money in investment products that she didn’t want or understand. She was clear from the start that she wanted the two-year fixed account she had seen and merely needed help opening it.

Danielle said: ‘I was being totally bamboozled by an adviser. He started suggesting options and bringing diagrams out. There were so many accounts it was silly.

‘Some of the options were investment products which he highly recommended, but I had no clue about them. I just wanted to stick my cash away into what I thought was a simple savings account and not worry about it for the next two years.’

Investment products come with a high risk – risks which Danielle says she was not fully warned about in the sales pitch.

So what’s with the hard-sell? A Halifax spokesman, said: ‘The group continuously reviews its policies and processes and from the start of this year we have made significant changes to our incentive schemes.

‘Today, these schemes reward staff for providing high quality customer service, assessed by a wide range of metrics. We reward behaviours that are focused on achieving correct customer outcomes and excellent service as well as monitoring sales through direct customer feedback to ensure that colleagues have met customer needs appropriately.

So should the sales adviser just have opened the fixed-rate account for her, seeing as she was already armed with the knowledge of which product she wanted?

The spokesman added: ‘Depending on the account, customers may be able to open accounts in branch utilising a branch's phone or internet facilities. However, a customer wanting to open an account in person in branch will need to see an adviser to do so. As part of this process, customers are always asked, amongst other things, about their risk appetite.

‘This advice ensures that customers see all of the options that are available to them, appropriate to their level of risk appetite.

‘As part of the incentive scheme in place, advisers would be rewarded irrespective of whether the customer puts their money into a savings account or an investment.’

Danielle, after kindly refusing all of the offers that were put on the table, finally managed to open the two-year fixed account, but left the branch feeling exhausted after the hard sell.

STAMP THESE SNEAKY SELLING TACTICS OUT: If you have received a hard-sell sales pitch or work in a bank and have seen mis-selling first-hand, please contact me in confidence: lee.boyce@thisismoney.co.uk.